Question

Paula Logston is the owner and operator of a high-end online custom clothing company. Paula has never heard of Porter's Five Forces model and she wants to understand why she would perform an analysis using it. If you were tasked with explaining Porter's Five Forces model to Paula what would be the primary reason she would want to use this type of analysis?

Answer 1

Porter's Five Forces are necessary to understand the forces that affect your business.

Step-by-step explanation:

In order to keep the business up and running it is important to keep a close eye on multiple factors outside of your business especially your direct and indirect competition.

Porter's Five Forces model sheds light on all crucial forces that will affect your business in terms of competitiveness. The model discusses how competition, suppliers, buyers, new entrants and substitutes have the power to make or break your business.